EXHIBIT 1.1
VIALOG CORPORATION
_______ Shares/1/
Common Stock
UNDERWRITING AGREEMENT
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________ ___, 1998
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXXXX & COMPANY, INC.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Vialog Corporation, a Massachusetts corporation (the "Company"), and each
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of Conference Source International, Inc., a Georgia corporation, Call Points,
Inc., a Delaware corporation, Xxxxxxx Square Teleconferencing, Inc., a
Massachusetts corporation, American Conferencing Company, Inc., a Delaware
corporation, Telephone Business Meetings, Inc., a Delaware corporation,
Communication Development Corporation, a Connecticut corporation, and ABC
Acquisition Corporation, a Delaware corporation (the "Vialog Merger Subsidiary")
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(each, a "Subsidiary" and collectively, the "Subsidiaries") hereby confirm their
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agreement with the several underwriters named in Schedule 1 hereto (the
"Underwriters"), for whom you have been duly authorized to act as
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representatives (in such capacities, the "Representatives"), as set forth below.
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All references herein to the Representatives shall be deemed to be to the
Underwriters.
Pursuant to an agreement and plan of reorganization (the "Acquisition
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Agreement") by and among the Company, the Vialog Merger Subsidiary, A Business
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Conference Call, Inc., a Minnesota corporation ("ABCC"), Xxxxxx X. Xxxxxx and
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Xxxxxx X. Xxxxx, the Company through the Vialog Merger Subsidiary, its wholly-
owned subsidiary, will acquire by merger, all of the issued and outstanding
stock of ABCC. The transactions contemplated by the Acquisition Agreement are
herein referred to as the "Acquisition."
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/1/ Plus an option to purchase from Vialog Corporation up to _____________
additional shares to cover over-allotments.
1. Securities. Subject to the terms and conditions herein contained, the
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Company proposes to issue and sell to the several Underwriters an aggregate of
___ shares (the "Firm Securities") of the Company's common stock, par value $.01
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per share ("Common Stock"). The Company also proposes to issue and sell to the
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several Underwriters not more than _______________ additional shares of Common
Stock if requested by the Representatives as provided in Section 3 of this
Agreement. Any and all shares of Common Stock to be purchased by the
Underwriters pursuant to such option are referred to herein as the "Option
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Securities," and the Firm Securities and any Option Securities are collectively
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referred to herein as the "Securities."
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2. Representations and Warranties of the Company and the Subsidiaries. The
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Company and the Subsidiaries, jointly and severally, represent and warrant to
and agree with each of the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-53395) with respect to
the Securities, including a prospectus subject to completion, has been
filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and
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one or more amendments to such registration statement may have been so
filed. After the execution of this Agreement, the Company will file with
the Commission either (i) if such registration statement, as it may have
been amended, has been declared by the Commission to be effective under the
Act, either (A) if the Company relies on Rule 434 under the Act, a Term
Sheet (as hereinafter defined) relating to the Securities, that shall
identify the Preliminary Prospectus (as hereinafter defined) that it
supplements containing such information as is required or permitted by
Rules 434, 430A and 424(b) under the Act or (B) if the Company does not
rely on Rule 434 under the Act, a prospectus in the form most recently
included in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement), with such
changes or insertions as are required by Rule 430A under the Act or
permitted by Rule 424(b) under the Act, and in the case of either clause
(i)(A) or (i)(B) of this sentence as have been provided to and approved by
the Representatives prior to the execution of this Agreement, or (ii) if
such registration statement, as it may have been amended, has not been
declared by the Commission to be effective under the Act, an amendment to
such registration statement, including a form of prospectus, a copy of
which amendment has been furnished to and approved by the Representatives
prior to the execution of this Agreement. The Company may also file a
related registration statement with the Commission pursuant to Rule 462(b)
under the Act for the purpose of registering certain additional Securities,
which registration shall be effective upon filing with the Commission. As
used in this Agreement, the term "Original Registration Statement" means
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the registration statement initially filed relating to the Securities, as
amended at the time when it was or is declared effective, including all
financial schedules and exhibits thereto and including any information
omitted therefrom pursuant to Rule 430A under the Act and included in the
Prospectus (as hereinafter defined); the term "Rule 462(b) Registration
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Statement" means any registration statement filed with the Commission
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pursuant to Rule 462(b) under the Act (including the Registration Statement
and any Preliminary Prospectus or Prospectus incorporated therein at the
time such Registration Statement becomes effective); the term "Registration
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Statement" includes both the Original Registration Statement and any Rule
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462(b) Registration Statement; the term "Preliminary Prospectus" means each
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prospectus subject to completion filed with such registration statement or
any amendment thereto (including the prospectus subject to completion, if
any, included in the Registration Statement or any amendment thereto at the
time it was or is declared effective); the term "Prospectus" means:
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(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule
424(b)(7) under the Act, together with the Preliminary Prospectus
identified therein that such Term Sheet supplements;
(B) if the Company does not rely on Rule 434 under the Act, the prospectus
first filed with the Commission pursuant to Rule 424(b) under the Act;
or
(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under the
Act, the prospectus included in the Registration Statement;
and the term "Term Sheet" means any term sheet that satisfies the
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requirements of Rule 434 under the Act. Any reference herein to the "date" of a
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Prospectus that includes a Term Sheet shall mean the date of such Term Sheet.
(b) The Commission has not issued any order preventing or suspending use of any
Preliminary Prospectus. When any Preliminary Prospectus was filed with the
Commission it (i) contained all statements required to be stated therein in
accordance with, and complied in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. When the Registration Statement or any amendment
thereto was or is declared effective, it (i) contained or will contain all
statements required to be stated therein in accordance with, and complied
or will comply in all material respects with the requirements of, the Act
and the rules and regulations of the Commission thereunder and (ii) did not
or will not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not
misleading. When the Prospectus or any Term Sheet that is a part thereof
or any amendment or supplement to the Prospectus is filed with the
Commission pursuant to Rule 424(b) (or, if the Prospectus or part thereof
or such amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing such amendment
or supplement to the Prospectus was or is declared effective) and on the
Firm Closing Date and any Option Closing Date (both as hereinafter
defined), the Prospectus, as amended or supplemented at any such time,
(i) contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material respects
with the requirements of, the Act and the rules and regulations of the
Commission thereunder and (ii) did not or will not include any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they
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were made, not misleading. The foregoing provisions of this paragraph (b)
do not apply to statements or omissions made in any Preliminary Prospectus,
the Registration Statement or any amendment thereto or the Prospectus or
any amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(c) If the Company has elected to rely on Rule 462(b) and the Rule 462(b)
Registration Statement has not been declared effective (i) the Company has
filed a Rule 462(b) Registration Statement in compliance with and that is
effective upon filing pursuant to Rule 462(b) and has received confirmation
of its receipt and (ii) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with the filing of
the Rule 462(b) Registration Statement, in compliance with Rule 111
promulgated under the Act or the Commission has received payment of such
filing fee.
(d) Each written contract to which the Company is a party and to which
reference is made in the Prospectus has been duly and validly executed, is
in full force and effect in accordance with its respective terms, and,
except as set forth in the Prospectus, none of such contracts has been
assigned by the Company; and, except as set forth in the Prospectus, the
Company knows of no present fact, condition or act which could prevent
compliance with the terms of such contracts, as amended to date. Except
for amendments or modifications of such contracts in the ordinary course of
business and except as may be disclosed in the Prospectus, the Company has
no intention of exercising any right which it may have to cancel any of its
obligations under any of such contracts, and has no knowledge that any
other party to any of such contracts has any intention not to render full
performance under such contracts. None of the provisions of such contracts
or documents violates any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court having
jurisdiction over the Company or any of its assets or businesses.
(e) The Company and each of the Subsidiaries have been duly organized and are
validly existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation and are duly qualified to
transact business as foreign corporations and are in good standing under
the laws of all other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective businesses
requires such qualification, except where the failure to be so qualified
would not, individually or in the aggregate, have a material adverse effect
on the general affairs, management, business, condition (financial or
otherwise), prospects, net worth or results of operations of the Company
and the Subsidiaries, taken as a whole (any such event, a "Material Adverse
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Effect").
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(f) The Company and each of the Subsidiaries have full power (corporate and
other) to own or lease their respective properties and conduct their
respective businesses as described in the Registration Statement and the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus; and the Company and each of the Subsidiaries have
full power (corporate and other) to enter into this Agreement and to carry
out all the terms and provisions hereof to be carried out by each of them,
respectively.
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(g) The issued shares of capital stock of each of the Subsidiaries have been
duly authorized and validly issued, are fully paid and nonassessable, were
not issued in violation of any preemptive or similar rights and are owned
beneficially by the Company free and clear of any security interests,
liens, encumbrances, equities, claims or restrictions on transferability
(other than those imposed by the Act and the securities or "Blue Sky" laws
of certain jurisdictions) or voting.
(h) The Company has an authorized, issued and outstanding capitalization as set
forth in the Prospectus or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus. All of the issued shares of capital stock
of the Company have been duly authorized and validly issued, were not
issued in violation of any preemptive or similar rights and are fully paid
and nonassessable. No sales of securities have been made by the Company in
violation of the provisions of the Act, the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or state securities laws. The Firm
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Securities and the Option Securities have been duly authorized and at the
Firm Closing Date or the related Option Closing Date (as the case may be),
after payment therefor in accordance herewith, will be validly issued,
fully paid and nonassessable. No holders of outstanding shares of capital
stock of the Company are entitled as such to any preemptive or other rights
to subscribe for any of the Securities, and no holder of securities of the
Company has any right which has not been fully exercised or waived to
require the Company to register the offer or sale of any securities owned
by such holder under the Act in the public offering contemplated by this
agreement.
(i) The capital stock of the Company conforms to the description thereof
contained in the Prospectus or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus.
(j) Except as disclosed in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), there are no
outstanding (A) securities or obligations of the Company or any of the
Subsidiaries convertible into or exchangeable for any capital stock of the
Company or any such Subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any Subsidiary any such
capital stock or any such convertible or exchangeable securities or
obligations, or (C) obligations of the Company or any Subsidiary to issue
any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options.
(k) The consolidated financial statements and schedules of the Company and its
consolidated subsidiaries (including the notes thereto) included in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
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existence, the most recent Preliminary Prospectus) fairly present the
financial position of the Company and its consolidated subsidiaries and the
results of operations and changes in financial condition as of the dates
and periods therein specified. Such financial statements and schedules
(including the notes thereto) have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved (except as otherwise noted therein). The summary and
selected financial data set forth under the captions "Summary Historical
and Pro Forma Financial Data" and "Selected Financial Data" in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present, on the basis stated in the
Prospectus (or such Preliminary Prospectus), the information included
therein. Except as described in the Prospectus (or, if the Prospectus is
not in existence, the Preliminary Prospectus), the pro forma financial
statements under the headings "Summary Historical and Pro Forma Financial
Data" and "Selected Financial Data" (including the notes thereto) and the
other pro forma financial information (but excluding all projected or
forecasted financial information) included in the Prospectus (or, if the
Prospectus is not in existence, the Preliminary Prospectus) (i) comply as
to form in all material respects with the applicable requirements of
Regulation S-X promulgated under the Exchange Act, (ii) have been prepared
in accordance with the Commission's rules and guidelines with respect to
pro forma financial statements, and (iii) have been properly computed on
the bases described therein. The assumptions used in the preparation of the
pro forma financial data and other pro forma and projected financial
information included in the Prospectus (or, if the Prospectus is not in
existence, the Preliminary Prospectus) are reasonable and the adjustments
used therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(l) KPMG Peat Marwick, LLP, who have certified certain financial statements of
the Company and the Subsidiaries and delivered their report with respect to
the audited financial statements and schedules included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus), are independent public accountants
as required by the Act and the applicable rules and regulations thereunder.
(m) The execution and delivery of this Agreement have been duly authorized by
the Company and each of the Subsidiaries and this Agreement has been duly
executed and delivered by the Company and each of the Subsidiaries, and is
the valid and binding agreement of the Company and each of the
Subsidiaries, enforceable against the Company and each of the Subsidiaries
in accordance with its terms.
(n) No legal or governmental proceedings are pending to which the Company or
any of the Subsidiaries is a party or to which the property of the Company
or any of the Subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not described therein
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), and no such proceedings have been threatened against the
Company or any of the Subsidiaries or with respect to any of their
respective properties; and no contract or other document is required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement that is not described therein (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus) or filed as required.
(o) The issuance, offering and sale of the Securities to the Underwriters by
the Company pursuant to this Agreement, the compliance by the Company and
each of the Subsidiaries with the other provisions of this Agreement and
the consummation of the other transactions herein contemplated do not (i)
require the consent, approval, authorization, registration or qualification
of or with any governmental authority, except such as have been
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obtained, such as may be required under state securities or blue sky laws
and, if the registration statement filed with respect to the Securities (as
amended) is not effective under the Act as of the time of execution hereof,
such as may be required (and shall be obtained as provided in this
Agreement) under the Act, or (ii) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or any of their respective
properties are bound, or the charter documents or by-laws of the Company or
any of its subsidiaries, or any law or statute or any judgment, decree,
order, rule or regulation of any court or other governmental authority or
any arbitrator applicable to the Company or any of its subsidiaries.
(p) Subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus, neither the Company nor
any of the Subsidiaries has sustained any material loss or interference
with their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from
any labor dispute or any legal or governmental proceeding and there has not
been any Material Adverse Effect, or any development involving a
prospective Material Adverse Effect, except in each case as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(q) None of the Company and the Subsidiaries has, directly or indirectly,
(i) taken any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities or (ii) since the filing
of the Registration Statement (A) sold, bid for, purchased, or paid anyone
any compensation for soliciting purchases of, the Securities or (B) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company (except for the sale of
Securities under this Agreement).
(r) The Company has not distributed and, prior to the later of (i) the Firm
Closing Date and (ii) the completion of the distribution of the Securities,
will not distribute any offering material in connection with the offering
and sale of the Securities other than the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or other materials, if any permitted by
the Act.
(s) Subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), (1) the Company and the
Subsidiaries have not incurred any material liability or obligation, direct
or contingent, nor entered into any material transaction not in the
ordinary course of business; (2) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock; and (3) there
has not been any material change in the capital
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stock, short-term debt or long-term debt of the Company and the
Subsidiaries, except in each case as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(t) The Company and each of the Subsidiaries have good and marketable title in
fee simple to all items of real property and marketable title to all
personal property owned by each of them and/or described in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), in each case free and clear of any security interests, liens,
encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such property and do not
interfere with the use made or proposed to be made of such property by the
Company or such Subsidiary, and any real or personal property and buildings
held under lease by the Company or any of the Subsidiaries are held under
valid, subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made or proposed to be made of
such property and buildings by the Company or such Subsidiary, in each case
except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(u) No labor dispute with the employees of the Company or any of the
Subsidiaries exists or is threatened or imminent that could result in a
Material Adverse Effect, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(v) The Company and the Subsidiaries own or possess, or can acquire on
reasonable terms, all material patents, patent applications, trademarks,
service marks, trade names, licenses, copyrights and proprietary or other
confidential information currently employed by them in connection with
their respective businesses, and neither the Company nor any Subsidiary has
received any notice of infringement of or conflict with asserted rights of
any third party with respect to any of the foregoing which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect, except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(w) The Company and each of the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; neither the Company nor any Subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor any
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not result in a Material Adverse Effect,
except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(x) No Subsidiary is currently prohibited, directly or indirectly, from paying
any dividends to the Company, from making any other distribution on such
Subsidiary's capital stock, from repaying to the Company any loans or
advances to such Subsidiary from the
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Company or from transferring any of such Subsidiary's property or assets to
the Company or any other Subsidiary of the Company, except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(y) The Company and each of the Subsidiaries possess all licenses,
certificates, authorizations, consents, orders, approvals and permits
issued by, and has made all declarations and filings with, all appropriate
federal, state, local or foreign regulatory authorities necessary to own or
lease and to operate its respective properties and to conduct their
respective businesses as now or proposed to be conducted as set forth in
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), and neither the Company nor any Subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such license, certificate, authorization, consent,
order, approval or permit which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect, except as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(z) Neither the Company nor any of the Subsidiaries will conduct its operations
in a manner that will subject it to registration as an investment company
under the Investment Company Act of 1940, as amended, and this transaction
will not cause the Company to become an investment company subject to
registration under such Act.
(aa) Each of the Company and the Subsidiaries has filed all foreign, federal,
state and local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not have a Material Adverse Effect) and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing is due and payable, except for
any such assessment, fine or penalty that is currently being contested in
good faith and for which the company or such Subsidiary has provided
adequate reserves, or as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(bb) Neither the Company nor any of the Subsidiaries is in violation of any
federal or state law or regulation relating to public or occupational
safety and health or to pollution, the environment or the storage, handling
or transportation of hazardous or toxic materials ("Environmental Law") and
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the Company and each Subsidiary have received all permits, licenses or
other approvals required of them under applicable Environmental Law in
connection with the ownership, operation or use of their respective
businesses, property and assets, and the Company and each Subsidiary are in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or approvals which
would not, singly or in the aggregate, result in a Material Adverse Effect,
and except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
Except as disclosed in the Prospectus (or, if the Prospectus is not in
existence, the Preliminary Prospectus), none of the Company or the
Subsidiaries is subject to any liability, absolute or
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contingent, under any Environmental Law except for any such liability which
would not, individually or in the aggregate, have a Material Adverse
Effect.
(cc) Each certificate signed by any officer of the Company or any of the
Subsidiaries and delivered to the Representatives or counsel for the
Underwriters shall be deemed to be a joint and several representation and
warranty by the Company and each of the Subsidiaries to each Underwriter as
to the matters covered thereby.
(dd) Except for the shares of capital stock of each of the Subsidiaries owned by
the Company, neither the Company nor any Subsidiary owns any shares of
stock or any other equity securities or long-term debt securities or has
any equity interest in any firm, partnership, association or other entity,
except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(ee) There are no holders of securities of the Company, who, by reason of the
filing of the Registration Statement, have the right (and have not waived
such right) to request the Company to register under the Act, or to include
in the Registration Statement, securities held by them.
(ff) The Company and each of the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that
(1) transactions are executed in accordance with management's general or
specific authorizations; (2) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(3) access to assets is permitted only in accordance with management's
general or specific authorization; and (4) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(gg) No breach or default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default in the due performance
and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which
the Company or any of the Subsidiaries is a party or by which the Company
or any of the Subsidiaries or any of their respective properties is bound,
except for any such breach, default or event which would not, individually
or in the aggregate, have a Material Adverse Effect.
(hh) None of the Company or the Subsidiaries has any liability for any
prohibited transaction or funding deficiency or any complete or partial
withdrawal liability with respect to any pension, profit sharing or other
plan which is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), to which the Company or any of the Subsidiaries
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makes or ever has made a contribution and in which any employee of the
Company or any of the Subsidiaries is or has ever been a participant. With
respect to such plans, the Company and each Subsidiary is in compliance in
all material respects with all applicable provisions of ERISA.
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(ii) None of the Company or any of the Subsidiaries nor any director, officer,
agent, employee or other person associated with or acting on behalf of the
Company or any of the Subsidiaries has used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic governmental official or employee from
corporate funds; violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(jj) As of the date hereof, the Acquisition has closed in escrow and on the Firm
Closing Date the Acquisition shall have been finally consummated. On and
as of the Firm Closing Date, the merger contemplated by the Acquisition
Agreement shall have become effective pursuant to the laws of Minnesota and
Delaware and the Company shall be the sole record and beneficial owner of
the equity of the surviving corporation of the merger, as contemplated by
the Acquisition Agreement. Other than the payment of the cash
consideration to be paid in the Acquisition, all conditions precedent to
the Acquisition have been satisfied (and not waived) and the Acquisition
Agreement has not been modified or amended in any way and is identical in
all respects to the Acquisition Agreement delivered to the Representatives
on or prior to the date hereof. The Acquisition Agreement will, on the Firm
Closing Date, conform in all material respects to the description thereof
contained in the Prospectus.
(kk) The Company has good and marketable title to all of the securities of the
surviving corporation of the merger contemplated by the Acquisition
Agreement, in each case free and clear of any security interests, liens,
encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such securities and do not
interfere with the use made or proposed to be made of such securities by
the Company, except as described in or contemplated by the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(ll) No relationship, direct or indirect, exists and no transaction has occurred
between or among the Company and/or any of its Subsidiaries, on the one
hand, and the directors, officers, stockholders, customers or suppliers of
the Company and/or any of its Subsidiaries on the other hand, which is
required to be described in the Prospectus and is not so described.
3. Purchase, Sale and Delivery of the Securities. (a) On the basis of
---------------------------------------------
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company, at a purchase
price of $________ per share, the number of Firm Securities set forth opposite
the name of such Underwriter in Schedule 1 hereto. One or more certificates in
definitive form for the Firm Securities that the several Underwriters have
agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Representatives request upon notice to
the Company at least 48 hours prior to the Firm Closing Date, shall be delivered
by or on behalf of the Company to the Representatives for the respective
accounts of the Underwriters, against payment by or on behalf of the
Underwriters
11
of the purchase price therefor by wire transfer in same-day funds (the "Wired
-----
Funds") to the account of the Company. Such delivery of and payment for the
------
Firm Securities shall be made at the offices of Cadwalader, Xxxxxxxxxx & Xxxx,
000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000 at 9:30 A.M., New York time, on
__________, 1998, or at such other place, time or date as the Representatives
and the Company may agree upon or as the Representatives may determine pursuant
to Section 9 hereof, such time and date of delivery against payment being herein
referred to as the "Firm Closing Date". The Company will make such certificate
-----------------
or certificates for the Firm Securities available for checking and packaging by
the Representatives at the offices in New York, New York of the Company's
transfer agent or registrar or of Prudential Securities Incorporated
("Prudential") at least 24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Securities as contemplated by the Prospectus,
the Company hereby grants to the several Underwriters an option to purchase,
severally and not jointly, the Option Securities. The purchase price to be paid
for any Option Securities shall be the same price per share as the price per
share for the Firm Securities set forth above in paragraph (a) of this Section
3. The option granted hereby may be exercised as to all or any part of the
Option Securities from time to time within thirty days after the date of the
Prospectus (or, if such 30th day shall be a Saturday or Sunday or a holiday, on
the next business day thereafter when the New York Stock Exchange is open for
trading). The Underwriters shall not be under any obligation to purchase any of
the Option Securities prior to the exercise of such option. The Representatives
may from time to time exercise the option granted hereby by giving notice in
writing or by telephone (confirmed in writing) to the Company setting forth the
aggregate number of Option Securities as to which the several Underwriters are
then exercising the option and the date and time for delivery of and payment for
such Option Securities. Any such date of delivery shall be determined by the
Representatives but shall not be earlier than two business days or later than
five business days after such exercise of the option and, in any event, shall
not be earlier than the Firm Closing Date. The time and date set forth in such
notice, or such other time on such other date as the Representatives and Company
may agree upon or as the Representatives may determine pursuant to Section 9
hereof, is herein called the "Option Closing Date" with respect to such Option
-------------------
Securities. Upon exercise of the option as provided herein, the Company shall
become obligated to sell to each of the several Underwriters, and, subject to
the terms and conditions herein set forth, each of the Underwriters (severally
and not jointly) shall become obligated to purchase from the Company, the same
percentage of the total number of the Option Securities as to which the several
Underwriters are then exercising the option as such Underwriter is obligated to
purchase of the aggregate number of Firm Securities, as adjusted by the
Representatives in such manner as they deem advisable to avoid fractional
shares. If the option is exercised as to all or any portion of the Option
Securities, one or more certificates in definitive form for such Option
Securities, and payment therefor, shall be delivered on the related Option
Closing Date in the manner, and upon the terms and conditions, set forth in
paragraph (a) of this Section 3, except that reference therein to the Firm
Securities and the Firm Closing Date shall be deemed, for purposes of this
paragraph (b), to refer to such Option Securities and Option Closing Date,
respectively.
12
(c) The Company hereby acknowledges that the wire transfer by or on behalf
of the Underwriters of the purchase price for any Shares does not constitute
closing of a purchase and sale of the Shares. Only execution and delivery of a
receipt for Shares by the Underwriters indicates completion of the closing of a
purchase of the Shares from the Company. Furthermore, in the event that the
Underwriters wire funds to the Company prior to the completion of the closing of
a purchase of Shares, the Company hereby acknowledges that until the
Underwriters execute and deliver a receipt for the Shares, by facsimile or
otherwise, the Company will not be entitled to the Wired Funds and shall return
the Wired Funds to the Underwriters as soon as practicable (by wire transfer of
same-day funds) upon demand. In the event that the closing of a purchase of
Shares is not completed and the Wired Funds are not returned by the Company to
the Underwriters on the same day the Wired Funds were received by the Company,
the Company agrees to pay to the Underwriters in respect of each day the Wired
Funds are not returned by it, in same-day funds, interest on the amount of such
Wired Funds in an amount representing the Underwriters' cost of financing as
reasonably determined by Prudential.
(d) It is understood that either of you, individually and not as one of the
Representatives, may (but shall not be obligated to) make payment on behalf of
any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such Underwriter
or Underwriters from any of its or their obligations hereunder.
4. Offering by the Underwriters. Upon your authorization of the release
----------------------------
of the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set forth in the Prospectus.
5. Covenants of the Company. The Company covenants and agrees with each
------------------------
of the Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this Agreement, and any
amendments thereto to become effective as promptly as possible. If required,
the Company will file the Prospectus or any Term Sheet that constitutes a part
thereof and any amendment or supplement thereto with the Commission in the
manner and within the time period required by Rules 434 and 424(b) under the
Act. During any time when a prospectus relating to the Securities is required
to be delivered under the Act, the Company (i) will comply with all requirements
imposed upon it by the Act and the rules and regulations of the Commission
thereunder to the extent necessary to permit the continuance of sales of or
dealings in the Securities in accordance with the provisions hereof and of the
Prospectus, as then amended or supplemented, and (ii) will not file with the
Commission the prospectus, Term Sheet or the amendment referred to in the second
sentence of Section 2(a) hereof, any amendment or supplement to such Prospectus,
Term Sheet or any amendment to the Registration Statement or any Rule 462(b)
Registration Statement of which the Representatives previously have been advised
and furnished with a copy for a reasonable period of time prior to the proposed
filing and as to which filing the Representatives shall not have given their
consent. The Company will prepare and file with
13
the Commission, in accordance with the rules and regulations of the Commission,
promptly upon request by the Representatives or counsel for the Underwriters,
any amendments to the Registration Statement or amendments or supplements to the
Prospectus that may be necessary or advisable in connection with the
distribution of the Securities by the several Underwriters, and will use its
best efforts to cause any such amendment to the Registration Statement to be
declared effective by the Commission as promptly as possible. The Company will
advise the Representatives, promptly after receiving notice thereof, of the time
when the Registration Statement or any amendment thereto has been filed or
declared effective or the Prospectus or any amendment or supplement thereto has
been filed and will provide evidence satisfactory to the Representatives of each
such filing or effectiveness.
(b) The Company will advise the Representatives, promptly after receiving
notice or obtaining knowledge thereof, of (i) the issuance by the Commission of
any stop order suspending the effectiveness of the Original Registration
Statement or any Rule 462(b) Registration Statement or any amendment thereto or
any order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, (ii) the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, (iii)
the institution, threatening or contemplation of any proceeding for any such
purpose or (iv) any request made by the Commission for amending the Original
Registration Statement or any Rule 462(b) Registration Statement, for amending
or supplementing the Prospectus or for additional information. The Company will
use its best efforts to prevent the issuance of any such stop order and, if any
such stop order is issued, to obtain the withdrawal thereof as promptly as
possible.
(c) The Company will arrange for the qualification of the Securities for
offering and sale under the securities or blue sky laws of such jurisdictions as
the Representatives may designate and will continue such qualifications in
effect for as long as may be necessary to complete the distribution of the
Securities, provided, however, that in connection therewith the Company shall
-----------------
not be required to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under the Act
or (ii) the Option Closing Date, any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary at any time to
amend or supplement the Prospectus to comply with the Act or the rules or
regulations of the Commission thereunder, the Company will promptly notify the
Representatives thereof and, subject to Section 5(a) hereof, will prepare and
file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the Representatives
and to counsel for the Underwriters a signed copy and a conformed copy of the
registration statement
14
originally filed with respect to the Securities and each amendment thereto (in
each case including exhibits thereto) or any Rule 462(b) Registration Statement,
certified by the Secretary or an Assistant Secretary of the Company to be true
and complete copies thereof as filed with the Commission by electronic
transmission, (ii) to each other Underwriter, a conformed copy of such
registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long as a
prospectus relating to the Securities is required to be delivered under the Act,
as many copies of each Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto as the Representatives may reasonably request; without
limiting the application of clause (iii) of this sentence, the Company, not
later than (A) 6:00 P.M., New York City time, on the date of determination of
the public offering price, if such determination occurred at or prior to 10:00
A.M., New York City time, on such date or (B) 2:00 P.M., New York City time, on
the business day following the date of determination of the public offering
price, if such determination occurred after 10:00 A.M., New York City time, on
such date, will deliver to the Underwriters, without charge, as many copies of
the Prospectus and any amendment or supplement thereto as the Representatives
may reasonably request for purposes of confirming orders that are expected to
settle on the Firm Closing Date.
(f) The Company, as soon as practicable, will make generally available to
its securityholders and to the Representatives a consolidated earnings statement
of the Company and its subsidiaries that satisfies the provisions of Section
11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of the Securities
as set forth under "Use of Proceeds" in the Prospectus.
(h) The Company will not, directly or indirectly, without the prior written
consent of Prudential, on behalf of the Underwriters, offer, sell, offer to
sell, contract to sell, pledge, grant any option to purchase or otherwise sell
or dispose (or announce any offer, sale, offer of sale, contract of sale,
pledge, grant of any option to purchase or other sale or disposition) of any
shares of Common Stock or any securities convertible into, or exchangeable or
exercisable for, shares of Common Stock for a period of 180 days after the date
hereof, except pursuant to this Agreement and except for issuances pursuant to
the exercise of employee stock options outstanding on the date hereof or
pursuant to the terms of convertible securities of the Company outstanding on
the date hereof.
(i) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company (except for the sale of Securities under this Agreement).
15
(j) The Company will obtain the agreements described in Section 7(f) hereof
prior to the Firm Closing Date.
(k) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date, any
rumor, publication or event relating to or affecting the Company shall occur as
a result of which in your opinion the market price of the Common Stock has been
or is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after notice from you advising the Company to the
effect set forth above, forthwith prepare, consult with you concerning the
substance of, and disseminate a press release or other public statement,
reasonably satisfactory to you, responding to or commenting on such rumor,
publication or event.
(l) If the Company elects to rely on Rule 462(b), the Company shall both
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) and pay the applicable fees in accordance with Rule 111 promulgated
under the Act by the earlier of (i) 10:00 P.M. Eastern time on the date of this
Agreement and (ii) the time confirmations are sent or given, as specified by
Rule 462(b)(2).
(m) The Company will cause the Securities to be duly included for quotation
on the Nasdaq National Market prior to the Firm Closing Date. The Company will
ensure that the Securities remain included for quotation on the Nasdaq National
Market following the Firm Closing Date.
(n) Prior to the Option Closing Date, the Company will furnish to the
Representatives, as soon as they have been prepared, a copy of any unaudited
interim, financial statements of the Company for any period subsequent to the
period covered by the most recent financial statements appearing in the
Prospectus.
(o) During the period of three years after the last date of original
issuance of the Securities, the Company will not be or become an "investment
company" under the Investment Company Act.
6. Expenses. The Company and the Subsidiaries agree, jointly and
--------
severally, to pay all costs and expenses incident to the performance of their
obligations under this Agreement, whether or not the transactions contemplated
herein are consummated or this Agreement is terminated pursuant to Section 11
hereof, including all costs and expenses incident to (i) the printing or other
production of documents with respect to the transactions, including any costs of
printing the registration statement originally filed with respect to the
Securities and any amendment thereto, any Rule 462(b) Registration Statement,
any Preliminary Prospectus and the Prospectus and any amendment or supplement
thereto, this Agreement and any blue sky memoranda, (ii) all arrangements
relating to the delivery to the Underwriters of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the accountants and
any other experts or advisors retained by the Company, (iv) preparation,
issuance and delivery to the Underwriters of any certificates evidencing the
Securities, including transfer agent's and registrar's fees, (v) the
qualification of the Securities
16
under state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto, (vi) the filing
fees of the Commission and the National Association of Securities Dealers, Inc.
relating to the Securities, (vii) any quotation of the Securities on the Nasdaq
National Market, (viii) any meetings with prospective investors in the
Securities (other than as shall have been specifically approved by the
Representatives to be paid for by the Underwriters) and (ix) advertising
relating to the offering of the Securities (other than as shall have been
specifically approved by the Representatives to be paid for by the
Underwriters). If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 7 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 11 hereof or because of any failure, refusal or inability on
the part of the Company to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including counsel fees and
disbursements) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities. The Company shall not in any event
be liable to any of the Underwriters for the loss of anticipated profits from
the transactions covered by this Agreement.
7. Conditions of the Underwriters' Obligations. The obligations of the
-------------------------------------------
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Firm Closing Date, as if made on and as of the Firm Closing
Date, to the accuracy of the statements of the Company's officers made pursuant
to the provisions hereof, to the performance by the Company of its covenants and
agreements hereunder and to the following additional conditions:
(a) If the Original Registration Statement or any amendment thereto filed
prior to the Firm Closing Date has not been declared effective as of the time of
execution hereof, the Original Registration Statement or such amendment and, if
the Company has elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have been declared effective not later than the earlier of
(i) 11:00 A.M., New York time, on the date on which the amendment to the
registration statement originally filed with respect to the Securities or to the
Registration Statement, as the case may be, containing information regarding the
initial public offering price of the Securities has been filed with the
Commission and (ii) the time confirmations are sent or given as specified by
Rule 462(b)(2), or with respect to the Original Registration Statement, or such
later time and date as shall have been consented to by the Representatives; if
required, the Prospectus or any Term Sheet that constitutes a part thereof and
any amendment or supplement thereto shall have been filed with the Commission in
the manner and within the time period required by Rules 434 and 424(b) under the
Act; no stop order suspending the effectiveness of the Registration Statement or
any amendment thereto shall have been issued, and no proceedings for that
purpose shall have been instituted or threatened or, to the knowledge of the
Company or the Representatives, shall be contemplated by the Commission; and the
Company shall have complied with any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise).
17
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date of Xxxxxx, X'Xxxxxxx, Xx Xxxxxx & Xxxxxx, LLP, counsel for the
Company and the Subsidiaries, to the effect that:
(i) the Company and each of the Subsidiaries have been duly organized
and are validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation and are duly qualified to
transact business as foreign corporations and are in good standing under
the laws of all other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective businesses
requires such qualification, except where the failure to be so qualified
would not, individually or in the aggregate, have a Material Averse Effect;
(ii) the Company and each of the Subsidiaries have corporate power to
own or lease their respective properties and conduct their respective
businesses as described in the Registration Statement and the Prospectus,
and the Company and each of the Subsidiaries have corporate power to enter
into this Agreement and to carry out all the terms and provisions hereof to
be carried out by it;
(iii) the issued shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and
nonassessable, were not issued in violation of any preemptive or similar
rights and are owned beneficially by the Company free and clear of any
perfected security interest or, to the best knowledge of such counsel, any
other security interests, liens, encumbrances, equities, claims or
restrictions on transferability (other than those imposed by the Act and
the securities or "Blue Sky" laws of certain jurisdictions) or voting;
other than the Subsidiaries, there is no other subsidiary of the Company;
(iv) the Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus; all of the issued shares of
capital stock of the Company have been duly authorized and validly issued
and are fully paid and nonassessable, have been issued in compliance with
all applicable federal and state securities laws and were not issued in
violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities; no sales of securities have been made
by the Company in violation of the provisions of the Act, the Exchange Act,
or state securities laws; the Firm Securities have been duly authorized by
all necessary corporate action of the Company and, when issued and
delivered to and paid for by the Underwriters pursuant to this Agreement,
will be validly issued, fully paid and nonassessable; the Securities have
been duly included for trading on the Nasdaq National Market; no holders of
outstanding shares of capital stock of the Company are entitled as such to
any preemptive or other rights to subscribe for any of the Securities; and
no holders of securities of the Company are entitled to have such
securities registered under the Registration Statement;
(v) the statements set forth under the heading "Description of Capital
Stock" in the Prospectus, insofar as such statements purport to summarize
certain provisions of
18
the capital stock of the Company, provide a fair summary of such
provisions; and the statements set forth under the headings "Risk Factors--
Regulation," "Business--Regulation," "Business--Legal Proceedings" and
"Description of Capital Stock" in the Prospectus, insofar as such
statements constitute a summary of the legal matters, documents or
proceedings referred to therein, provide a fair summary of such legal
matters, documents and proceedings;
(vi) the execution and delivery of this Agreement have been duly
authorized by all necessary corporate action of the Company and the
Subsidiaries. This Agreement has been duly executed and delivered by each
of the Company and the Subsidiaries;
(vii) (A) no legal or governmental proceedings are pending to which
the Company or any of the Subsidiaries is a party or to which the property
of the Company or any of the Subsidiaries is subject that are required to
be described in the Registration Statement or the Prospectus and are not
described therein, and, to the best knowledge of such counsel, no such
proceedings have been threatened against the Company or any of the
Subsidiaries or with respect to any of their respective properties and (B)
no contract or other document is required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement that is not described therein or filed as
required;
(viii) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by
the Company and the Subsidiaries with the other provisions of this
Agreement and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except
such as have been obtained and such as may be required under state
securities or blue sky laws, or (B) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, lease, or other agreement or
instrument, known to such counsel, to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the Subsidiaries
or any of their respective properties are bound, or the charter documents
or by-laws of the Company or any of the Subsidiaries, or any statute or any
judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator known to such counsel and
applicable to the Company or the Subsidiaries or any of their respective
properties or assets;
(ix) the Registration Statement is effective under the Act; any
required filing of the Prospectus, or any Term Sheet that constitutes a
part thereof, pursuant to Rules 434 and 424(b) has been made in the manner
and within the time period required by Rules 434 and 424(b); and no stop
order suspending the effectiveness of the Registration Statement or any
amendment thereto has been issued, and no proceedings for that purpose have
been instituted or threatened or, to the best knowledge of such counsel,
are contemplated by the Commission;
19
(x) the Registration Statement originally filed with respect to the
Securities and each amendment thereto, any Rule 462(b) Registration
Statement and the Prospectus (in each case, other than the financial
statements and other financial information contained therein, as to which
such counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act and the rules and
regulations of the Commission thereunder;
(xi) if the Company elects to rely on Rule 434, the Prospectus is not
"materially different," as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time of its
effectiveness or an effective post-effective amendment thereto (including
such information that is permitted to be omitted pursuant to Rule 430A);
(xii) neither the Company nor any of the Subsidiaries is an
"investment company" or "promoter" or "principal underwriter" for an
"investment company" as such terms are defined in the Investment Company
Act;
(xiii) the merger contemplated by the Acquisition Agreement shall
have become effective pursuant to the laws of Minnesota and Delaware, and
the Company is the sole record and beneficial owner of the shares of the
equity of the surviving corporation of the merger;
(xiv) except as disclosed in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), there are no
outstanding (A) securities or obligations of the Company or any of the
Subsidiaries convertible into or exchangeable for any capital stock of the
Company or any such Subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any Subsidiary any such
capital stock or any such convertible or exchangeable securities or
obligations, or (C) obligations of the Company or any Subsidiary to issue
any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options; and
(xvi) to the knowledge of such counsel, each of the Company and the
Subsidiaries hold all material licenses, certificates and permits from
governmental authorities necessary for the conduct of its business as
described in the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
Such counsel shall also state that they have no reason to believe that the
Registration Statement, as of its effective date, contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date or the date of such opinion, included or includes any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
20
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws of the State of ________, to the extent satisfactory in form
and scope to counsel for the Underwriters, upon the opinion of [insert name of
---------------
local counsel], addressed to the Underwriters and dated the Firm Closing Date, a
--------------
copy of which will be attached to the opinion of counsel for the Company. The
foregoing opinion shall also state that the Underwriters are justified in
relying upon such opinion of [insert name of local counsel], copies of such
------------------------------
opinion shall be delivered to the Representatives and counsel for the
Underwriters.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.
(c) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Cadwalader, Xxxxxxxxxx & Xxxx, counsel for the Underwriters,
with respect to the issuance and sale of the Firm Securities, the Registration
Statement and the Prospectus, and such other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters. In rendering such opinion, such
counsel may rely as to all matters of law upon the opinion of [insert name of
---------------
local counsel] referred to in paragraph (b) above.
--------------
(d) The Representatives shall have received from KPMG Peat Marwick, LLP a
letter or letters dated, respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the Representatives, to the effect
that:
(i) they are independent public accountants with respect to the
Company and its consolidated subsidiaries within the meaning of the Act and
the applicable rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial statements
and schedules and pro forma financial statements examined by them and
included in the Registration Statement and the Prospectus comply in form in
all material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and regulations;
(iii) on the basis of their limited review in accordance with
standards established by the American Institute of Certified Public
Accountants of any interim unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries as indicated in
their report included in the Registration Statement and the Prospectus,
carrying out certain specified procedures (which do not constitute an
examination made in accordance with generally accepted auditing standards)
that would not necessarily reveal matters of significance with respect to
the comments set forth in this paragraph (iii), a reading of the minute
books of the shareholders, the board of directors and any committees
thereof of the Company and each of its consolidated subsidiaries, and
inquiries of certain officials of the Company
21
and its consolidated subsidiaries who have responsibility for financial and
accounting matters, nothing came to their attention that caused them to
believe that:
(A) the unaudited consolidated condensed financial statements of the
Company and its consolidated subsidiaries included in the Registration
Statement and the Prospectus do not comply in form in all material respects
with the applicable accounting requirements of the Act and the related
published rules and regulations thereunder or are not in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited consolidated financial statements
included in the Registration Statement and the Prospectus;
(B) at a specific date not more than five business days prior to the
date of such letter, there were any changes in the capital stock or long-
term debt of the Company and its consolidated subsidiaries or any decreases
in net current assets or stockholders' equity of the Company and its
consolidated subsidiaries, in each case compared with amounts shown on the
March 31, 1998 unaudited consolidated balance sheet included in the
Registration Statement and the Prospectus, or for the period from April 1,
1998 to such specified date there were any decreases (or increases in any
negative amounts), as compared with the period commencing January 1, 1998
and ending on such date which is the same number of days after January 1,
1998 as the specified date is after April 1, 1998, in net revenues, loss
before income taxes or total or per share amounts of net loss of the
Company and its consolidated subsidiaries, except in all instances for
changes, decreases or increases set forth in such letter;
(iv) they have carried out certain specified procedures, not constituting
an audit, with respect to certain amounts, percentages and financial information
that are derived from the general accounting records of the Company and its
consolidated subsidiaries and are included in the Registration Statement and the
Prospectus under the captions "Prospectus Summary," "Risk Factors,"
"Capitalization," "Dilution," "Selected Financial Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Business," "Management," "Certain Transactions," "Principal Stockholders" and
"Description of Capital Stock" and in Exhibit 11 to the Registration Statement,
and have compared such amounts, percentages and financial information with such
records of the Company and its consolidated subsidiaries and with information
derived from such records and have found them to be in agreement, excluding any
questions of legal interpretation.
(v) on the basis of a reading of the unaudited pro forma consolidated
condensed financial statements included in the Registration Statement and the
Prospectus, carrying out certain specified procedures that would not necessarily
reveal matters of significance with respect to the comments set forth in this
paragraph (v), inquiries of certain officials of the Company and the
Subsidiaries and ABCC who have responsibility for financial and accounting
matters and proving the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the unaudited pro forma consolidated
condensed financial statements, nothing came to their attention that caused them
to believe that the unaudited pro forma consolidated condensed financial
statements do not comply in form in all material respects with
22
the applicable accounting requirements of Rule 11-02 of Regulation S-X or that
the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
In the event that the letters referred to above set forth any such changes,
decreases or increases, it shall be a further condition to the obligations of
the Underwriters that (A) such letters shall be accompanied by a written
explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement and the Prospectus in this
paragraph (d) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(e) The Representatives shall have received a certificate, dated the Firm
Closing Date, of the principal executive officer and the principal financial or
accounting officer of the Company and each of the Subsidiaries to the effect
that:
(i) the representations and warranties of the Company and each of the
Subsidiaries in this Agreement are true and correct as if made on and as of
the Firm Closing Date; the statements of the Company's and the
Subsidiaries' officers made pursuant to any certificate delivered in
accordance with the provisions hereof shall be true and correct in all
material respects as if made on and as of the Firm Closing Date. The
Registration Statement, as amended as of the Firm Closing Date, does not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading, and
the Prospectus, as amended or supplemented as of the Firm Closing Date,
does not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
the Company has performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Firm
Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto has been issued, and no proceedings for
that purpose have been instituted or threatened or, to the best of the
Company's knowledge, are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, neither the Company
nor any of the Subsidiaries has sustained any material loss or interference
with their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from
any labor dispute or any legal or governmental proceeding, and there has
not been any material adverse change, or any development involving a
prospective material adverse change which could result in a Material
23
Adverse Effect, except in each case as described in or contemplated by the
Prospectus (exclusive of any amendment or supplement thereto).
(f) The Representatives shall have received from each person who is a
director or officer of the Company and each other person or entity who owns
10,000 shares of Common Stock an agreement to the effect that such person will
not, directly or indirectly, without the prior written consent of Prudential, on
behalf of the Underwriters, offer, sell, offer to sell, contract to sell,
pledge, grant any option to purchase or otherwise sell or dispose (or announce
any offer, sale, offer of sale, contract of sale, pledge, grant of any option to
purchase or other sale or disposition) of any shares of Common Stock or any
securities convertible into, or exchangeable or exercisable for, shares of
Common Stock for a period of 180 days after the date of this Agreement.
(g) On or before the Firm Closing Date, the Representatives and counsel for
the Underwriters shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company.
(h) Prior to the commencement of the offering of the Securities, the
Securities shall have been included for trading on the Nasdaq National Market.
(i) The Representatives shall have received evidence to their satisfaction
that: (i) on or before the Firm Closing Date, the Acquisition shall have been
finally consummated; (ii) on and as of the Firm Closing Date, the merger
contemplated by the Acquisition Agreement shall have become effective pursuant
to the laws of Minnesota and Delaware and the Company shall be the sole record
and beneficial owner of the equity of the surviving corporation of the merger,
as contemplated by the Acquisition Agreement; (iii) other than the payment of
the cash consideration to be paid in the Acquisition, all conditions precedent
to the Acquisition shall have been satisfied (and not waived) and the
Acquisition Agreement shall not have been modified or amended in any way and
shall be identical in all respects to the Acquisition Agreement delivered to the
Representatives on or prior to the date hereof; and (v) the Acquisition
Agreement shall, on the Firm Closing Date, conform in all material respects to
the description thereof contained in the Prospectus.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and pay
for any Option Securities shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Firm Securities, except that all references
to the Firm Securities and the Firm Closing Date shall be deemed to refer to
such Option Securities and the related Option Closing Date, respectively.
24
8. Indemnification and Contribution. (a) The Company and the Subsidiaries,
--------------------------------
jointly and severally, agree to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by the
Company or any of the Subsidiaries in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any material
fact contained in (A) the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto or (B) any application or other document, or any amendment or
supplement thereto, executed by the Company or based upon written
information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Securities under the securities or
blue sky laws thereof or filed with the Commission or any securities
association or securities exchange (each an "Application"),
-----------
(iii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or
(iv) any untrue statement or alleged untrue statement of any material
fact contained in any audio or visual materials used in connection with the
marketing of the Securities, including without limitation, slides, videos,
films, tape recordings,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company or any
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Subsidiary will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto or any Application in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein; and
provided, further, that the Company or any Subsidiary will not be liable to any
-------- -------
Underwriter or any person controlling such Underwriter with respect to any such
untrue statement or omission made in any Preliminary Prospectus that is
corrected in the Prospectus (or any amendment or supplement thereto) if the
person asserting any such loss, claim, damage or liability purchased Securities
from such Underwriter but was not sent or given a copy of the Prospectus (as
amended or supplemented) at or prior to the written
25
confirmation of the sale of such Securities to such person in any case where
such delivery of the Prospectus (as amended or supplemented) is required by the
Act, unless such failure to deliver the Prospectus (as amended or supplemented)
was a result of noncompliance by the Company or any Subsidiary with Section 5(d)
and (e) of this Agreement. This indemnity agreement will be in addition to any
liability which the Company or any of the Subsidiaries may otherwise have. The
Company and the Subsidiaries will not, without the prior written consent of the
Underwriter or Underwriters purchasing, in the aggregate, more than fifty
percent (50%) of the Securities, settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
such Underwriter or any person who controls any such Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party to
such claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of all of the Underwriters and such
controlling persons from all liability arising out of such claim, action, suit
or proceeding.
(b) Each Underwriter, severally and not jointly, will indemnify and hold
harmless each of the Company, the Subsidiaries, their directors, officers who
signed the Registration Statement and each person, if any, who controls the
Company or any of the Subsidiaries within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Company or any of the Subsidiaries or any such
director, officer or controlling person may become subject under the Act,
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or any
Application or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or any Application or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein: and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company or any of the Subsidiaries or
any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or any action
in respect thereof. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under
26
this Section 8. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include
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both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be one or more legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnifying party
shall not have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the Representatives in
the case of paragraph (a) of this Section 8, representing the indemnified
parties under such paragraph (a) who are parties to such action or actions) or
(ii) the indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the consent
of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided for in the
preceding paragraphs of this Section 8 is unavailable or insufficient, for any
reason, to hold harmless an indemnified party in respect of any losses, claims,
damages or liabilities (or actions in respect thereof), each indemnifying party,
in order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect (i) the relative benefits received by
the indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Securities or (ii) if the allocation provided
by the foregoing clause (i) is not permitted by applicable law, not only such
relative benefits but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party on the other in connection
with the statements or omissions or alleged statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Subsidiaries on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
27
total proceeds from the offering (before deducting expenses) received by the
Company and the Subsidiaries bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault of the parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Subsidiaries or the Underwriters, the parties' relative intents, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Subsidiaries and the Underwriters agree that
it would not be equitable if the amount of such contribution were determined by
pro rata or per capita allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
into account the equitable considerations referred to above in this paragraph
(d). Notwithstanding any other provision of this paragraph (d), no Underwriter
shall be obligated to make contributions hereunder that in the aggregate exceed
the total discounts, commissions and other compensation received by such
Underwriter under this Agreement, less the aggregate amount of any damages that
such Underwriter has otherwise been required to pay in respect of the same or
any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section II (f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the Prudential Securities Incorporated Master Agreement Among Underwriters.
For purposes of this paragraph (d), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each director of the Company or the Subsidiaries, each officer of the Company or
the Subsidiaries who signed the Registration Statement and each person, if any,
who controls the Company or any of the Subsidiaries within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, shall have the same
rights to contribution as the Company or the Subsidiaries.
9. Default of Underwriters. If one or more Underwriters default in their
-----------------------
obligations to purchase Firm Securities or Option Securities hereunder and the
aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the
28
Representatives are not made within 36 hours after such default for the purchase
by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company and the Subsidiaries
other than as provided in Section 10 hereof. In the event of any default by one
or more Underwriters as described in this Section 9, the Representatives shall
have the right to postpone the Firm Closing Date or the Option Closing Date, as
the case may be, established as provided in Section 3 hereof for not more than
seven business days in order that any necessary changes may be made in the
arrangements or documents for the purchase and delivery of the Firm Securities
or Option Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
-----------
Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Survival. The respective representations, warranties, agreements,
--------
covenants, indemnities and other statements of the Company and the Subsidiaries,
their officers and the several Underwriters set forth in this Agreement or made
by or on behalf of them, respectively, pursuant to this Agreement shall remain
in full force and effect, regardless of (i) any investigation made by or on
behalf of the Company and the Subsidiaries, any of their respective officers or
directors, any Underwriter or any controlling person referred to in Section 8
hereof and (ii) delivery of and payment for the Securities. The respective
agreements, covenants, indemnities and other statements set forth in Sections 6
and 8 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated with respect to the
-----------
Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, in the event that the Company
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Firm Closing Date or such Option Closing Date,
respectively,
(i) the Company or any of the Subsidiaries shall have, in the sole
judgment of the Representatives, sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute, or any legal or governmental
proceeding, or there shall have been any material adverse change, or any
development involving a prospective material adverse change (including
without limitation a change in management or control of the Company or the
Subsidiaries), in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and the
Subsidiaries, except in each case as described in or contemplated by the
Prospectus (exclusive of any amendment or supplement thereto);
29
(ii) trading in the Common Stock shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities generally
on the New York Stock Exchange, American Stock Exchange or Nasdaq National
Market shall have been suspended or minimum or maximum prices shall have
been established on any such exchange or market system.
(iii) a banking moratorium shall have been declared by New York,
Massachusetts or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or material
adverse change in general economic, political or financial conditions
having an effect on the U.S. financial markets that, in the sole judgment
of the Representatives, makes it impractical or inadvisable to proceed with
the public offering or the delivery of the Securities as contemplated by
the Registration Statement, as amended as of the date hereof.
(v) The Acquisition Agreement shall have terminated, or in the
reasonable view of the Representatives, the Acquisition will not be finally
consummated on or prior to the Firm Closing Date with no material changes
in form or substance to the Acquisition or Acquisition Agreement from that
described in the Prospectus (exclusive of any amendment or supplement
thereto).
(b) Termination of this Agreement pursuant to this Section 11 shall be
without liability of any party to any other party except as provided in Section
10 hereof.
12. Information Supplied by Underwriters. The statements set forth in the
-------------------------------------
last paragraph on the front cover page and under the heading "Underwriting" in
any Preliminary Prospectus or the Prospectus (to the extent such statements
relate to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Sections 2(b) and 8 hereof. The Underwriters confirm that such statements (to
such extent) are correct.
13. Notices. All communications hereunder shall be in writing and, if
-------
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group, with a copy to Xxxxxxxxx & Company, Inc., 00000 Xxxxx Xxxxxx
Xxxxxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx X.
Xxxxxx, and a copy to Cadwalader Xxxxxxxxxx & Xxxx, 000 Xxxxxx Xxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxxxx X. Xxxxxx; and if sent to the Company, shall
be delivered or sent by mail, telex or facsimile transmission and confirmed in
writing to the Company at Vialog Corporation, 00 Xxx Xxxxxxx Xxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx.
30
14. Successors. This Agreement shall inure to the benefit of and shall be
----------
binding upon the several Underwriters, the Company and the Subsidiaries and
their respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company and the Subsidiaries contained in Section 8 of
this Agreement shall also be for the benefit of any person or persons who
control any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act and (ii) the indemnities of the Underwriters contained in
Section 8 of this Agreement shall also be for the benefit of the directors of
the Company and the Subsidiaries, the officers of the Company and the
Subsidiaries who have signed the Registration Statement and any person or
persons who control the Company or the Subsidiaries within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act. No purchaser of
Securities from any Underwriter shall be deemed a successor because of such
purchase.
15. Applicable Law. The validity and interpretation of this Agreement,
--------------
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any provisions relating to conflicts of laws.
16. Consent to Jurisdiction and Service of Process. All judicial
----------------------------------------------
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, the Company accepts for itself and
in connection with its properties, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts and waives any defense of
forum non conveniens and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. The Company designates and appoints
__________________, and such other persons as may hereafter be selected by the
Company irrevocably agreeing in writing to so serve, as its agent to receive on
its behalf service of all process in any such proceedings in any such court,
such service being hereby acknowledged by the Company to be effective and
binding service in every respect. A copy of any such process so served shall be
mailed by registered mail to the Company at its address provided in Section 13
hereof; provided, however, that, unless otherwise provided by applicable law,
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any failure to mail such copy shall not affect the validity of service of such
process. If any agent appointed by the Company refuses to accept service, the
Company hereby agrees that service of process sufficient for personal
jurisdiction in any action against the Company in the State of New York may be
made by registered or certified mail, return receipt requested, to the Company
at its address provided in Section 13 hereof, and the Company hereby
acknowledges that such service shall be effective and binding in every respect.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of any Underwriter to bring
proceedings against the Company in the courts of any other jurisdiction.
31
17. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
32
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company and each of the
several Underwriters.
Very truly yours,
VIALOG CORPORATION
By ________________________
[Title]
CONFERENCE SOURCE INTERNATIONAL, INC.
By ________________________
[Title]
CALL POINTS, INC.
By ________________________
[Title]
XXXXXXX SQUARE TELECONFERENCING, INC.
By ________________________
[Title]
AMERICAN CONFERENCING COMPANY, INC.
By ________________________
[Title]
TELEPHONE BUSINESS MEETINGS, INC.
By ________________________
[Title]
33
COMMUNICATION DEVELOPMENT CORPORATION
By ________________________
[Title]
ABC ACQUISITION CORPORATION
By ________________________
[Title]
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXXXX & COMPANY, INC.
By PRUDENTIAL SECURITIES INCORPORATED
By _____________________
Xxxx-Xxxxxx Canfin
Managing Director
For itself and on behalf of the Representatives.
34
SCHEDULE 1
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
----------- --------------
Prudential Securities Incorporated....................
(insert names of other Representatives)
---------------------------------------
[insert names of other Underwriters
-----------------------------------
alphabetically by bracket or in other
-------------------------------------
order determined by Prudential
------------------------------
Securities Incorporated -
-------------------------
Equity Transactions Group]
--------------------------
Total....................................... __________
35
[SCHEDULE 2
SUBSIDIARIES
Name Jurisdiction of Incorporation]
---- ------------------------------
36
